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Rand stable as market eyes possible cabinet reshuffle

The rand was only marginally weaker against major global currencies despite market jitters about finance minister Nhlanhla Nene's future

08 October 2018 - 15:46
Karl Gernetzky

Finance Minister Nhlanhla Nene. Picture: BUSINESS DAY/TREVOR SAMSON

The rand was marginally weaker against major global currencies on Monday afternoon, well off the day’s lows.

Local political risk has spiked after reports that finance minister Nhlanhla Nene has offered to stand down, after it emerged last week he had not been forthcoming about meetings with the controversial Gupta family.

Speculation on Monday was that President Cyril Ramaphosa would now reshuffle his cabinet. Former Gauteng finance MEC Barbara Creecy and ANC treasurer-general Zwele Mkhize have been named in various media reports as possible replacements for Nene.

The rand fell to a one-month low against the dollar on Monday as a result of the Nene revelations, with the local currency also under pressure from a weaker euro, as well as generally risk-off sentiment on global markets.

The local currency performed better against the euro and sterling, both of which face their own political headwinds.

The EU’s conflict with Italy over its budget appeared to be intractable and headed for a showdown, while investors also appeared exhausted by the lack of progress in Brexit negotiations, said BK Asset Management MD Boris Schlossberg.

At 3.04pm the rand was at R14.9054 to the dollar from R14.7975, at R17.0936 to the euro from R17.0505 and at R19.4469 to the euro from R19.4222. The euro was at R1.1468 from $1.1523.

The yield on the benchmark R186 10-year government note was last bid at 9.295% from 9.23%, with the R207 at 7.5% from 7.48%.